More than 4.4 million square feet of industrial/warehouse space was leased in the greater Baltimore metropolitan region in fourth quarter 2021, according to a report recently released by Lee & Associates | Maryland. This brings to 15 million the cumulative total of square feet of industrial/warehouse space leased in the region during the last year.

The fully-integrated commercial real estate brokerage and management firm, which is headquartered in Columbia, also published data that indicates a net absorption of nearly 3.7 million square feet of space and a current vacancy rate of approximately 3.4 percent for the final quarter of last year. In third quarter 2021, these figures were 4.3 million square feet of space absorbed and a vacancy rate of 4.7 percent. Consistent with the previous quarter, approximately 12 million square feet of space is presently under construction locally.

“The execution of several large leases in Harford County contributed to the healthy absorption total and the resultant drop in the market-wide vacancy rate, as well as starting rental rates that have now ticked $2 to $3 higher from this time last year,” said Tom Whelan, principal, Lee & Associates | Maryland. “On the sales side, we are now seeing deals closing at cap rates below 4 percent. This activity is occurring most typically for buildings with just a few years left on the lease and are now being underwritten at current market rates.

“We foresee a long runway ahead for this asset class nationally and specifically among densely-populated submarkets, including the greater Baltimore-Washington, D.C. area, as retailers and suppliers attempt to keep pace with the same day and next-day demands of consumers,” said Whelen. “Despite nearly 1.6 million square feet of space being delivered last quarter, the historically-low vacancy rate declined again and the average asking rent is now approaching $7.50 per square foot.”